Most investors misunderstand diversification.

They say they want it.
But the moment part of their portfolio is not doing well, they panic.
And then comes the instinctive reaction, “Should I remove this fund? It is not performing.”

But here is the truth very few are willing to internalize:

Diversification is working precisely when something in your portfolio is not doing well.

If everything in your portfolio is going up at the same time, you are not diversified; you are concentrated.

Real diversification means your investments are behaving differently from each other.
Which means at any point in time, something will underperform.
Not because it is “bad.”
But because it is doing its job, protecting you from the unknown.

The purpose of diversification is not to make you feel good every month.
It is to protect you when you least expect things to go wrong.

But most investors, when faced with temporary underperformance, want to fire the bodyguard because he is not entertaining.

If you truly want diversification, you must accept asymmetry.
You must allow discomfort.
You must stop judging long-term strategy with short-term emotion.

You cannot want the benefits of diversification and then get upset when it looks like diversification.

If the next time you feel uneasy because one part of your portfolio is not doing well, do not ask “Should I remove this?”

Ask instead
“Is this discomfort actually a sign that my portfolio is working exactly as it should?”

That one question can save you from countless bad decisions.

Because successful investing is not about always feeling good; It is about always staying in the game.